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Jul 14, 2008


THE ASSESSMENT OF THE PRACTICE OF GOVERNMENTAL ACCOUNTING SYSTEM (A CASE STUDY IN WONAGO TOWN MUNICIPALITY)

 RESEARHCER   SUBMITTED FOR THE PARTIAL FULFILLMENT OF THE BACHELOR OF ARTS DEGREE IN ACCOUNTING




PREPARED BY: WOGENE ABEBE
ADVISOR: MOHAMMED ARAGE


DEPARTMENT OF ACCOUNTING & FINANCE
BUSINESS AND ECONOMICS COLLEGE
JIMMA UNIVERSITY


                                                                                
                                                                                 JUNE, 2013
JIMMA, ETHOPIA  



Acknowledgment

 First and for most I would like to thank the Almighty God. Next my sincerely gratitude and appreciation goes to my Advisor Mohammed A for his invaluable comments and advise to do this research paper. Also I would like to thank my family and friends who helped me to accomplish this research paper. Lastly but not least, my great appreciation also goes to W/ro Hana Ibrahim for typing the entire research report.

           

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                    ABSTRACT

This research paper is done on the topic of assessment of ractice of governmental accounting system in the case of wonago municipality. Governmental accounting system is used to make a decision concerning the use of limited resource including the identification of crucial decision area and determination of objectives and goals. Like other governmental organization, wonago municipality employees have the problem of not clearly understanding the practice of governmental accounting system. This paper has  the objective to assess and examine the practice of governmental accounting system of wonago town municipality. Primary and secondary sources are used and the data is analyzed by using descriptive type of analysis. Wonago municipality is unable to cope up with the improved governmental accounting system. Therefore, the municipality should train the employees of the administration and finance center and improve the existing accounting practice by following financial rules and administration.

 

 

 

 






                  TABLE OF CONTENT

Abstract
1.6 siginificane of the study
1.8 Limitation of the study

 

 






CHAPTER ONE

1. INTRODUCTION

1.1 Background of the Study

Currently, there are different kind of organization among them governmental organizations form the major ones. A governmental organization should use governmental accounting system to makes decisions concerning the use of limited resources including the identification crucial decision areas and determination of objectives and goals, to effectively direct and control its human and material resources to maintain and report the custodianship of resource and to contributes the effectiveness of the organization in fulfilling the desires and demands of all society. (Lynn and Freeman, 1982, pp. 9).

In Wonago town, there are different kinds of governmental organizations and the municipality of Wonago is one of the principal governmental organizations with the main objectives of giving quick and qualified services in social, economical and moral aspects.

The need to assess the practice of governmental accounting system of municipality of Wonago town arises because to see its problems and the way to improve it weakness and to examine its accounting practice.

Even through previous studies were made, there is a need of data assessment of the practice of governmental accounting system for this reason, by conducting this research would try to examine the existing governmental accounting system of Wonago town municipality by comparing with the GASB principles.


1.2 Background of the Organization

Municipality of Wonango town was established in 1942E.C. After the 1945 governmental proclamation of developing urban town.

The municipality changes his working system. Its primary objective is for giving quick and qualified services in social, economical and moral aspects.

The municipality has 10 departments and two kebele service giving branch. It has fifty five employees. From this forty five of them are permanent and the rest are contract employees. Land preparation and development agency, infrastructure and engineering service agency, administration and finance center, and administration and supply agency are some of departments found in the municipality. Wonango city municipality has its own revenue agency which collects revenue from different sources like property tax, lease contract, tax from market abattoir service rental income from governmental houses and others.


This town municipality is accountable to the provisional administration of Wonago town and monthly financial reports are prepared to explain how it had spent the budgets appropriated to it.

1.3 Statement of the Problem

A governmental organization should use governmental accounting system to make decisions concerning the use of limited resources.  Most of the time, the employees do not clearly understand the practice of assessing governmental accounting system.

Like other governmental organization Wonago town municipality employees who work on administration and finance center has also this problem and also the department has the problem of the absence of documents, lack of computers and lack of room this and other problems affect the assessment of the governmental accounting system of the municipality.


1.4 Objective of the Study

1.4.1. General Objective of the study

The general objectives of the study is to assess and examine the practice of governmental accounting system of Wonago town municipality

1.4.2. Specific Objective of the study

The specific objective of the study are:
1.  To assess whether the GASB principles are followed wisely.
2.  To investigate whether the accounting system of the municipality comply with these financial accounting standard principles.
3.  To investigate the problems of the organization in implementing the governmental accounting system
4.  To makes recommendation and give suggestion to the departments about the departure from the GASB principles since this could be a cause for causing problems

 


1.5. Research question


The main aim of the paper was attempted to answer the following basic research question.
1. Is the existing accounting system of Wonago town municipality going in conformity with GASB principles?
2. How well each governmental accounting principle is obeyed?
3.  What significant problem existed in the practice of governmental accounting system?
4. What measures are taken and planned to be taken to correct the problems in the administrative and finance?

1.6. Significance of the Study

This research would help the municipality specially the administration and finance center to see its problems. In addition, the research would also help the department to find out away to improve its weakness, if any, and to examine its accounting practice. The study would also provide some suggested solution for the identified problem.

1.7. Scope of the Study

The scope of the study is limited to on the twelve town municipality in Gede’o zone. The center has ten department of which are primarily concerned with giving quick and quality services to the society. The administration and finance center plays a key role for reporting the financial activities of the municipality, so this study would be give priority to this department, specifying area of study under the practice of the governmental accounting system.

1.8. Limitation of the study

In conducting this study the researcher would face the following problems time, financial and experience on the study of research.



1.9. Organization of the Paper

In this paper five chapters are included. The first chapter consists background of the study, statement of problem, objective of study, significance of the study, scope of the study and organization of the paper. Chapter two is all about review of related literature. Chapter three is about methodology. Chapter four of the paper consist of data presentation and analayztion. Finally the last chapter is all about Recommendation and conclusion.




CHAPTER TWO

2. Review of related literature

2.1. Definition of fund

“A fund is a fiscal and accounting entity with a self-balancing set of account recording cash and other financial resource together with all related liabilities and residual equities or balance and changes there in, which are segregated for the purpose of carrying on specific activities or attaining certain objective in accordance with special regulation, restriction and limitation”. (Lynn and Freeman, 1982, P.8).
They also state that accounting is the art of analysis recording summarizing, evaluating and interpreting an organization financial activities and status, and communicating the results (Lynn and Freeman, 1982, P.1).
They quoted that accounting is a service function and most evaluated to meet the information demand in a given event. (Lynn and Freeman, 1982, pp.8).
Although the structure of financial administration is not stand and a across all unit in government, a general pattern exist. (Lynn and Freeman, 1982, P.10).

2.1.2. Characteristics of Governmental Accounting

Lynn and freeman quoted that among the distinguishing characteristics of governmental accounting is the emphasis up on fund and budgetary controls that causes the accounting for most not for profit organization to more closely resemble cash flow or working capital change analysis than commercial accounting in which net income determination is a paramount consideration. The focal point of the most not for profit accounting and reporting is expandable resource, accounted for in expendable found entities and allocated by the budget and appropriation process (Lynn and Freeman, 1982, pp.16).

2.1.3. Objective of Governmental Accounting

Lynn and freeman put that accounting to a major committee of the American accounting association, the objective of accounting are to provide information for making decision concerning the use of limited resource, including the identification of crucial decision area and determination of objectives and goals. Effectives directing and controlling an organization human and material resource, maintaining and reporting the custodianship resources and Contributing to the effectiveness of all organization whether profit oriented or not in fulfilling the desires and demands of all society for social control or their function. ((Lynn and Freeman, 1982, pp.6).

2.1.4. Similarities and Difference Between Governmental Accounting and Commercial Accounting

According Lynn and freeman, non-for-profit organization are many similar to profit seeking enterprise for example.
They are integral parts of the same economic system and utilize similar resource in accomplishing their purpose, both most acquire and convert scare resource in to their respective goods or services ,financial management process are essentially similar a both and each most have available information system of which the accounting system is an integrals component if its managers and other interested persons or group are to receive relevant and timely for planning, directing, controlling and evaluating the use of its scarce resource, in as much as their resource are relatively scarce whether donated, received from consumers, acquired from investor or creditors or secured through taxation. Least cost analysis and other control and evaluation techniques are essential to assuring that resource are utilized economically, effectively and efficiently and in some case both produce similar product, example both government and private enterprise may own and operate transportation. Systems sanitation service and electric or gas utilities. (Lynn and Freeman, 1982, pp.3).

They also stated that there are many similarities in the accounting for profit – seeking and not – for- profit organization. A double entry system or accounts is recommended for both. The general machines of record keeping are the same, document from the basic record, books of original entry (journals) are kept and posted to general ledgers and subsidiary ledgers trial balance are drawn to prove the equality of debit and credit, a chart of account properly classified and properly fitted to their organization’s structure is essential to good accounting and of course, uniform terminology highly describe in both field (Lynn and Freeman, 1982, pp.8).

Though commercial type of accounting is employed where not for profit organization are engaged in commercial type of activities (eg electric and utilities) accounting and reporting for not profit endeavors have involved largely in view these key difference from profit seeking enterprise (Lynn and Freeman, 1982, Pp.11).
The objective and control factor underline the major difference between commercial and not for profit accounting. The primary consideration in this environmental is up on compliance and accounting reporting, and auditing have developed principally as tools of compliance control and demonstration (Lynn and Freeman, 1982, pp.12).
Use of the term “fund” in not for profit situation should be sharply distinguished form its use in private enterprise. A fund of a commercial enterprise is simply a portion of its use in private enterprise
A fund of commercial enterprise is simply a portion of its assets that has been restricted specific uses, not separate and distinct accounting entity. (Lynn and Freeman, 1982, pp.9).
On the other hand, a fund in the not-for-profit sense it a self contained accounting entity with its own asset. Liability, revenue, expenditure or expense, fund balance or other equity account and win its own ledgers (Lynn and Freeman, 1982 pp 9).

2.2. Government Accounting Principles

2.2.1. Definition of Accounting Principles

According to Lynn and freeman, the national council on governmental accounting defined accounting principles as “specific fundamental texts which, on the basis of reason, demonstrated performance, and general acceptance are generally essential to effective management control and financial reporting” (Lynn and Freeman, 1982, pp.27).
Lynn and freeman stated that governmental accounting systems should be organized and operated on a found basis (Lynn and Freeman, 1982, pp.28).

2.2.2 Evolution of Accounting Principles.

Lynn and Freeman 1982 pp.21 state although the origin of the profession of accountancy is sometimes traced to ancient governmental, modern municipal accounting us a development of the twentieth country.
The quoted that the accounting principle may be divided in to
(1)  Generally accepted accounting principle and legal compliance (2) fund accounting (3) fixed assets and long term liability. (4) basis of accounting (5) the budget and budgetary accounting (6) classification and terminology and (7) financial reporting ( Lynn and Freeman, PP.27).

2.2.3. Fund Accounting System

Accounting to Lynn and freeman, the fund concept involved an accounting segregation not necessarily the physical separation of resource; However, resource are often also physically segregated… for example, through use of separate checking accounting for cash resource of various fund (Lynn & Freeman, 1982, pp.28).

2.2.4 Type of Fund

Governmental fund like general fund, special revenue of fund, capital project fund, and proprietary funds like enterprise funds, and internal service funds and fiduciary funds like trust and agency funds should be used by state and local government. (Lynn and Freeman, 1982, pp.28).

2.2.5 Number of Funds

Governmental units should establish and maintain those fund required by law and sound financial administration. Only number of funds consistent with legal and operating requirements should be established (Lynn & Freeman, 1982, pp.31).

2.3 Accounting and the Budget Process

2.3.1 Basis of Accounting

Accounting to manual 3-5 the basis of accounting is the basis set of principles and rule employed by accounting system to determine when and how to record transactions. A transaction is an economic event that affects the financial position of the governmental (manual 3- 5 volume  version 1.1, pp. 5).
In the manual it is also stated that the cash is received or paid. The modified cash basis of accounting recognized transaction and events which have accrued by the year end and are normally expected to result in cash disbursement with in the specific legal grace period stimulated by a country’s financial regulations after year ends.

However, the modified accrual basis accounting recognizes transaction and events when they occur, irrespective of when cash is paid. There is no deferral of cost that will be consumed in future periods.

Assets that provide service in the future are expensed in the period acquired. Therefore, under the modified accrual basis of accounting assets and stocks are considered consumed and expensed of as soon as they are acquired. (Lynn and Freeman, 1982, pp.5).

Lynn and Free man stated that the modified accrual of or accrual basis of accounting as appropriate should be utilized in measuring financial position and operating result. (Lynn and Freeman, 1982, pp.35).

2.3.2 Budget Preparation

Lynn and Freeman described the budgeting is the process of allocating scarce resource to unlimited demand. (Lynn and Freeman, 1982, pp.75).
They also stated that after making his best estimate of the fund balance at the beginning of the budget, the chief budget officer must obtain estimates of the revenue source at current rate of taxes, fees and other charges, having produced such estimate the budget officer and the chief executive can compare them with revenue and expenditure of prior years and with detail knowledge of change in demands on the government and its program. Such comparison should provide an impression of the adequacy of estimated revenue to meet the needs for expenditure (Lynn and Freeman,1982, pp.77).

In the manual 3-5, it is stated that the budget process begin with the appropriate budget. The appropriate budget is the budget approved by the regional or local council. The appropriate budget is broken down by recurrent and capital expenditure. (Lynn and Freeman, 1982, pp18).                                                                                                                                                                                                                                                                                                                                                                                                                                                          
According to manual, Approved budget: the detailed breakdown of the appropriated budget by sub agency or project and source of finance,    Appropriate budget: is the legal mandate to spend form the consolidated funds and Adjusted budget: additional or reduction approved budget.

2.3.3 Revenue Estimates

Lynn and freeman   quoted that the process of estimating revenue has almost as many fact as there are types of revenue. The revenue for the property tax is computed by applying a rate determined by the legislative body to a lax base of assessed properly value. The latter may be expected to increase with building activity inflation and economic devloopemt since most assessment do not equal market value, property has revenue may also be changing the percentage of market value at which property is assessed. (Lynn and freeman, 1982, pp. 78).

2.3.4 Expenditure Planning

According to Lynn and Freeman, in large organization, expenditure planning should be considered a year round activity. The budget director and his budget examiners should be continually studying the agencies with whose budgets they will work because analysis of agency operation, including both what the agency does and how it does consideration to agency request.
 As stated on the manual 3-5 budget control has two key element. Those are expenditures including only if there is an available budget and actual expenditure does not exceed the adjusted budget. (Lynn and Freeman, 1982, pp.78).                                                                                                                                                  

2.3.5 Estimating Other Charges

Lynn and Freeman stated that, interest, contribution to pension fund, retirement of serial bond and contribution to sinking funds are ordinarily not allocated to any program or activity of an organizations unit. These expenditure estimates are therefore prepared by the budget officer. (Lynn and Freeman,1982, pp.86).

 However, refinements of accounting and budgeting are continually reducing the number of allocated expenditure. (Lynn and Freeman, 1982, pp.86).

2.3.6 Budget Execution

According to Lynn and Free man, the process of budget includes every operating decision and transaction made during the budget period by the legislative body expresses in financial term the government planned activities. Accounting keeps record of the result of the transaction and permit their summarization, reporting and comparison with plans. (Lynn and Freeman, 1982, pp. 92).










CHAPTER THREE

3. RESEARCH METHODOLOGY

3.1 Research Design

Research design is the science and art of planning procedures used to answer question rises for doing the study, so as a get most valid findings an efficient and relevant manner for the study and the research design implies that the researcher would used descriptive types of source of data and other technique for study activities.

3.2 Sampling Technique

Under the administration and finance center, there are 16 permanent employees among them 10 of them would be selected by using judgmental sampling. This method enable the researcher to select respondents who have willingness to give information and enable the researcher to select respondents who can give an accurate information.

3.3 Method of Data Collection

To conduct this study the researcher would use both primary and secondary data., The primary data was collected from concerned bodies like the administrative and finance hand, staff of this department and those who are believed to have relationship with this study by using questioner method of data collection, secondary source was the administrative document of the department like financial statement, monthly report and other written material.

3.4 Method of Data Analysis

The research would uses descriptive types of data analysis. The common form of data analysis is presenting the collected data in tabulation and percentage.
The analysis data would presented using table which help the researcher would presents all collected information in simplest from effectively as possible.

3.5 Data Presentations

The analyzed data would be presented by the time the department is scheduled. This is on this part major finding and possible recommendation would be more pronounced effectively concluded as possible.

















CHAPTER FOUR

4. Data Analysis And Production

This chapter is devoted for the assessment of the existing governmental accounting system of Wonago town municipality based on the data obtained form the questioners filled by 10 samples of staff members form 16 permanent employees o]f the administrative and finance center using the judgmental sampling technique.

4.1 Work plan

4.1 Participants Profile

Table 1
 Distribution of respondents based on their gender
Gender
No of respondents
Percentage
Male
6
60%
Female
4
40%
Total
10
100%
                   Source:- primary data
From the above table out of 10 respondents 6(60%) are males and 4(40%) are the female. This show that majority of the respondents are males. 
Table 2
Distribution of respondents based on their educational level
Level of education
No of respondents
Percentage
Certificate
2
20%
Diploma
3
30%
Degree
5
50%
Other
0
0%
Total
10
100%
          Source:- primary data
According to the above table out of 10 respondents 2(20%) are certificate holder, 3(30%) are diploma holder and the remaining 5(50%) are degree holders. So most of respondents are degree holder.

Table 3
Distribution of respondents based on their work experience,
Work experience (In year’s)
No of respondents
Percentage
2
1
10%
2-4
2
20%
4-6
4
40%
6-8
2
20%
Above 8
1
10%

110
100%

   Source:- primary data

From the above table out of 10 respondents 1(10%) have two year work experience, 2(20%) are a two to four  year work experience,4(40%) are a     four to six year work experience and 2(20%) are a six to eight year work experience and the  remaining 1(10%) are above eight year work experience. This indicated that most of respondents have a four to six year work experience.

Table 4,
        Distribution of respondents based on their profession
Response
No of respondents
Percentage
Es
7
70%
No
3
3
0%
Total
10
100%

            Source:- primary data

As the table show that out of 10 respondents 7(70%) said yes and the remaining 3(30%) said no. This show that majority of respondents are working on their profession.

4.2                      Over View of the accounting system Municipality

Table 5
Distribution of respondents based on the response about the accounting system used  
Accounting system
No of respondents
Percentage
Single entry
0
0%
Double entry
10
100%
Total
10
100%

          Source:- primary data

As show in the above table out of 10 respondents 10(100%) all of the respondents assured the implementation of the double accounting system.
Table 6
Distribution of respondents based on their concept about governmental accounting system
Response
No of respondents
Percentage
Yes
8
80%
No
2
20%
Total
10
100%
         Source:- primary  data
 As it is show in the above table about 8(80%) of respondents say that yes and the remaining 2(20%) have say no. As the above table proves, majorities of the respondent have a concept about governmental accounting system.

Table 7
Distribution of respondents based on their response on the existence of significant problem when implementation governmental accounting system.
Problem
No of respondents
Percentage
Existed
7
70%
Not existed
2
20%
I have no idea
1
10%
Total
10
100%
          Source:- primary data    
As we can see from the table, majority of the respondent implied the existence of significant problems.

4.3 The existence of fund accounting system of municipality

Table 8
Distribution of respondents based on their response about the existence of fund accounting system.
Response
No of respondents
Percentage
Yes
8
80%
No
0
0%
I have no on
2
20%
Total
10
100%
          Source:- primary data
As show in the above table out of 10 respondents 8(80%) have say yes and the remaining 2(20%) are on idea about the existent of fund accounting system. As the majority of the respondents of the municipality use the accounting system.
Table 9
Distribution of respondents based to their response about the existence of general capital assets and fund capital assets
Responses
No of respondents
Percentage
Yes
6
60%
No
2
20%
I have no idea
2
20%
Total
10
100%
            Source:- primary data
As the above table indicate that out of 10 respondents 6(60%) have say that yes, 2(20%) say that no and the remaining 2(20%) has no idea about the existence of general capital assets and fund capital assets
Table 10
Distribution of respondents based on their response about the recording of depreciation of capital assets
Response
No of respondents
Percentage
Yes
5
50%
No
3
30%
I have no idea
2
20%
Total
10
100%
            Source:- primary data
As it is show in the above table out of 10 respondents 5(50%) have say that yes, 3(30%) are say that no and the remaining 2(20%) have no idea about the recording of depreciation of capital assets. This show that majority of the respondents have a concept about the recording of depreciation of capital assets.






Table 11
Distribution of respondents based on their response about the basis of accounting used


Basis of accounting
No of respondents

Percentage
Accrual basis
0
0%
Cash basis
1
10%
Modified cash basis
8
80%
Modified case basis and cash basis
1
10%
Total  
10
100%
   Source:- primary data
As the above table show that out of 10 respondents 1(10%) have use cash basis,8(80%) use modified cash basis and the remaining 1(10%) are used modified cash basis and cash basis. This show that majority of respondents respond that the municipality uses modified cash basis of accounting
Table 12
Distribution of respondents based on their response about the measurement focus used

Basis of accounting
No of respondents

Percentage
Flow of economic resources focus
2
20%
Flow of current financial resource
7
70%
Other
1
10%
Total
10
100%
     Source:- primary data
As it is show in the above table out of 10 respondents 3(30%) have respond  the flow of economic resources focus,7(70%) flow of current financial resource. This show that majority of respondents respond the municipality focus on the flow of current financial resources.



Tables 13
Distribution of respondents based of their response about the adaptation of budget.
Basis of accounting
No of respondents
Percentage
Yes
8
80%
No
1
10%
I have no idea
1
10%
   
Total
10
100%
            Source:- primary data

As indicated by the above table out of 10 respondents 8(80%) have say that yes, 1(10%) are say that no and the remaining 1(10%) are say that I have no idea. This show majority of the respondents respond that budget is adopted is annually
Table 14
Distribution of respondents based their response about the existence of inter found transaction
Basis of accounting
No of respondents
Percentage
Yes
2
20%
No
7
70%
I have no idea
1
10%
Total
10
100%
            Source:- primary data
As the above table shows, majority of the respondent (70%) implied the absence of inter found transactions. Only two of them ascertained existence of inter found transaction
Table 15
Distributions of respondents based on their reply about the preparation of financial statement of governmental found.
Basis of accounting
No of respondents
Percentage
Yes
1
10
No
8
80
I have no idea
1
10
Total
10
100%
            Source:- primary data
As the above table shows majority of respondents respond based there is no financial statement of governmental fund, where only 10% verified existence of financial statements and the rest 10% lave no idea whether the statements prepared on not. For m this on can concluded that absence of periodical financial statements.
Table 16
Distribution of respondents based on their response about the operational reports
Basis of accounting
No of respondents
Percentage
Yes
9
90%
No
1
10%
I have no idea
0
0%
Total
10
100%
            Source:- primary data
As the majority of respondents (90%) assured, there is a preparation of operational reports but only 10% denied the fact. The fact, thus we can say that there is periodic operational reporting practice in the municipality
Table 17
Destruction of respondents based on their response about the existence of budget accounts
Basis of accounting
No of respondents
Percentage
Yes
8
80%
No
0
0%
I have no idea
2
20%
Total
10
100%

             Source:- primary data

As the above table indicates, there are budgetary accounts that are, used to record transaction relating to revenues, expenditures and other budget items are maintained since 8(80%) of the respondents ascertained the truth and only 2(20%) then have no idea about budgetary accounts.

Table 18
Distribution of respondents based on their response about the recording of estimated of their budgetary account of the beginning of the budgetary
Basis of accounting
No of respondents
Percentage
Yes
6
60%
No
2
20%
I have no idea
2
20%
Total
10
100%

              Source:- primary data


According to the above table, majority respondents (60) give their response that there is no recording estimates of those budgetary accounts at the beginning during and end of the fiscal year

Table 19
Distribution of respondents based on their responses about the existence of proprietary accounts which include balance sheet and operating statement accounts
Basis of accounting
No of respondents
Percentage
Yes
7
70%
No
2
20%
I have no idea
1
10%
Total
10
100%

            Source:- primary data

As the majority of the respondents 7(70%) responded there are proprietary account which include balance sheet and operating statement accounts that are show is the chart of account’s. only 2 (20%) of them indicated absence of proprietary account, while 1(10%) lack information.


 



Table 20
Distribution of respondents based on their response whether the municipality makes an effort to follow the right governmental accounting
Basis of accounting
No of respondents
Percentage
Yes
6
60%
No
4
40%
I have no idea
0
0%


10
100%

             Source:- primary data

The above table shows, even if the municipality exerting an effort to follow the right governmental accounting it is not satisfactory, since 6 (60%) of the respondents prove the idea and 4(40%) of then disproves absence efforts made by the municipality

















CHAPTER FIVE

Conclusion and recommendation

5.1 Conclusions

To sum up, as the data obtained from respondents showed, the existing accounting system of wonago town municipality is somewhat modern double entry system of accounts is used to recorded transaction and event and most of the employs have a concept about governmental accounting system. There are some problems for that matter measures are planned to be taken in hear future to solve these problems.
Concerning the existing accounting system they used the accounting system organized and operated on a fund basis.
Regarding the basic of accounting and measurement focus, the municipality use modified and that use flow of current financial resource focus.
Budget is adopted annually and there are budgetary accounts, but they are not rescored at the beginning of the physical year. There are also proprietary accounts which include balance sheet accounts and operating statement accounts.

5.2 Recommendations

Based on the finding, obtained from respondents, analysis and conclusions drown, the researcher forward the following
-        The municipality should train employees of the administration and finance center to cope up with the improved governmental accounting system.
-        The municipality should address those problems relating to the implementation of the right governmental accounting system and it should improve existing accounting practice by following financial administration rules and regulations in general and that SNNP state in particular.
-        The municipality should also introduce faces assets found account group to establish accounting control and accountability for the general fixed assets of the municipality
-        Financial statement of the municipality fixed should also be prepared periodically, because it is the means through which administrators discharge their responsibility again the resource generated and the purpose for which those resources are expanded to the public.
-        There should be recording of budgetary accounts to compare them with the actual results. This is because it is means of controlling the financial operation of the governmental with by legislative body of the governments.
-        The organization should further develop efficient operating procedures based on stipulated rules and regulation to facilitate the smooth performance of financial operation.
-         furthermore, the municipality should implement computerized accounting system to record financial data and report them accountability
-        Finally, the organization should make great effort to follow the right governmental accounting system as per financial rules and regulations of SNNP.







   

References

  1. Douglas p, 1993, Governmental & non profit accounting, Theory and practice, 2nd ed. USA.
  2. Edwards Lynn and Robert J. Free man. 1982 fund accounting theory and practice, 2nd Ed. USA
  3. Hay L. & Wilson E, 1995, Accounting for government and non profit entities, 10th ed. USA
  4. Manual 3-5 accounting system for regional sector Bureau (May 2008) volume I version 1-1, Addis Ababa Ethiopia.
  5. Training manual for executing the by 1998 budget project report: T-98, June 20, 2002. Addis Ababa Ethiopia.



















Jimma University
College of Business and Economics
Department of Accounting

This questionnaire is prepared for staff members of the administration center of Wonago town municipality to assess the existing accounting system of this organization.

It is designed for only academic purpose the response is kept on secret.

Remark A. It is not compulsory to write your name
              B. Please put x sign on the box provided.

Personal Questionnaire

1) Gender:   Male c                 Female c
2. level of educational
a. certificate c                         c. Degree     c     
b. Diploma First degree c      
3. Work experience         a. In the municipality c         
                                       b. other place c
4. Are you working on your profession?
          a. Yes c                b. No c     
5. What system of accounting is used in your organization?
          a. double entry system             b. Single entry systemc
6. Do you have a concept about governmental accounting system?
a. Yes c                b. No c     
7. Are significant problem existed in the implementation of governmental accounting?
a. Yes c                b. No c      c. I’ve no idea c
8. Do the accounting system organized and operated on a fund basis?
a. Yes c                b. No c      c. I’ve no idea c
9. Are there general capacity asset and fund capital asset?
a. Yes c                b. No c      c. I’ve no idea c
10. Is there recording for depreciation of capital assets?
a. Yes c                b. No c      c. I’ve no idea c
11. What basis of accounting is used to recognize transaction event?
a. accrual basis c           b. cash basis c
          c. modified cash basis c          d. modified cash and cash basis c
12. What measurement focus is used concerning whit the inflow and out flow of resource?
a. flow of economic resources focus c
b. flow of current financial resource focus c
c. other  c
13. Is the annual budget adopted annually?
a. Yes c                b. No c      c. I’ve no idea c
14. Are there inter fund transaction?
a. Yes c                b. No c      c. I’ve no idea c
15. Is there a preparation of financial statement funds?
a. Yes c                b. No c      c. I’ve no idea c
16. Are operational reports that showing the financial position operating results, and other pertinent information which are prepared periodically to control financial operation?
a. Yes c                b. No c      c. I’ve no idea c
17. Are there budgetary account that are used to record transaction relating to revenues and expenditure are other budget item ?
a. Yes c                b. No c      c. I’ve no idea c
18. Is there a recording of these budgetary account at the beginning of fiscal year?
a. Yes c                b. No c      c. I’ve no idea c
19. Are there the existence of proprietary which include balance sheet and operating statement accounts?
a. Yes c                b. No c      c. I’ve no idea c
20. Does the municipality make an effort to follow the right governmental accounting system?
a. Yes c                b. No c      c. I’ve no idea c



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